Return of the Renowned Speculator to Wall Street.—Recalling the Famous “Blind” Pool in Northern Pacific.—How Villard Captured Northern Pacific.—Pursuing the Tactics of Old Vanderbilt.—Raising Twelve Million Dollars on Paper Credit.—Villard Emerges from the “Blind” Pool a Great Railroad Magnate.—He Inflates His Great Scheme from Nothing to One Hundred Million Dollars.—His Unique Methods of Watering Stock as Compared with those of George I. Seney.
The return of Mr. Henry Villard to Wall Street, after two years’ absence in Germany, his native land, renews the public interest in the career of that bold speculator. My reminiscences of Wall Street affairs would be incomplete without a sketch of the daring railroad operations of this gentleman, which so fully illustrate some of the evils to which I have referred in my chapter on “Railroad Methods.”
The culminating point in the speculative history of Mr. Villard, which covered a period of five years, from 1879 to 1884, was the famous blind pool in Northern Pacific.
Instead of taking up the events of his life in detail, and carrying my readers to this point, I shall depart from the usual course of biography, and present the more interesting facts of the career of my hero at the beginning.
In his capture, of Northern Pacific he seems to have followed the methods of the elder Vanderbilt very closely, with the important exception that he failed in the consummation of his purpose. Vanderbilt always, eventually, triumphed.
Villard was the chief agent in forming the Oregon Railway and Navigation Company, which was organized for the purpose of consolidating the business of the Oregon Steam Navigation Company with that of the Oregon Steamship Company, and for the purpose of buying, building and operating railroads, as stated in the circular setting forth the objects of the company. The lines of the Oregon Railway and Navigation Company extended from Portland west to Wallula Junction.
The value of this property was seriously menaced by the project of the Northern Pacific to extend its lines west, with a terminus at Tacoma.
President Billings, of the Northern Pacific, rejected a proposition from Mr. Villard to accommodate the Northern Pacific by permitting it to reach the Pacific coast over the lines of the Oregon Railway Navigation Company.
It was at this juncture that Villard resorted to the old Vanderbilt tactics, by attempting to purchase stock enough of the Northern Pacific to enable him to control the property. For this purpose he formed a blind pool, in which Messrs. Woerishoffer, Pullman and Endicott, and a host of other solid men, were the original members. A fund of $8,000,000 was subscribed to purchase Northern Pacific stock. During the spring of 1881 the pool kept on buying steadily, and continued their operations until the middle of summer, when it was discovered that the treasury of the pool was almost exhausted without having effected its purpose of acquiring control of the Northern Pacific property.
Mr. Villard then called a meeting, explained matters, proposed to extend the scope of the pool’s operations, and to increase its membership. By showing the enormous profits to be gleaned in the future, he succeeded in getting $12,000,000 more subscribed. This secured the control of the road, and in September, 1881, Mr. Villard was elected President of Northern Pacific.